FMCN’s comments on China Internet advertising business in 2009

My last post on online advertising business can be found here:

http://chinese-net-gaming-stock.blogspot.com/2008/03/statistics-from-dcci-on-chinas-online.html

On 3/19/2008, FMCN had a earning conference. In this call conference, they talked about the overall internet advertising business in 2009.

Companies such Sina or Sohu might know a sector of China’s internet advertising business, but for the overall China internet advertising business, there is nobody better than FMCN. FMCN’s customers are companies such as Sina and Sohu. Therefore, it give them a bird’s eye view of the overall industry.

Given how well FMCN had been growing and how capable is Mr. Jason Jiang been piloting the company, there is nobody better than predicting the future direction of China’s internet advertising sector.

From the earning call transcript:

http://seekingalpha.com/article/69120-focus-media-q4-2007-earnings-call-transcript?source=yahoo

In 2009, he expect the overall advertising industry to grow a very strong 15%. He is confident FMCN will grow 50% in 2009. The following is the quote on the internet sector:

“…..for the Internet mobile advertising we believe actually during the Olympic period, the benefit of advertising in this media will be highlighted and we expect both Internet advertising and mobile handset advertising will grow very strongly in 2009 as these forms of media get recognized by the advertisers and it will enter a very strong growth period after the 2008 Olympics.”

He actually down play the effect of Olympics on FMCN. There won’t be any price increase specifically for the Olympics.

The above is exactly how I felt about the affect of Olympics. There will be some pick up for online advertising revenue prior and during the Olympics. But somehow, I felt the effect is being exaggerated.

But I think the real effect of the Olympics is to serve as the demonstration platform for all the new products (video, P2P, internet TV, blog, and other web 2.0 services) that companies such as Sina and Sohu had been working on. These new products are much more suitable for advertising than the old text-based products.